Canadian Tax Rules
As most of you know, BC and ON are implementing a Harmonized Sales Tax (HST) effective July 1, 2010. This means that if you are operating an online store and chargine taxes, your tax zones and classes will need to be adjusted to reflect the new rates.
Retailers who currently charge GST will automatically be registered for HST. The same reporting period will apply. Those of you currently charging PST will need to contact your provincial ministry after July 1 to finalize and cancel your account.
The following Tax Rate Table reflects general Canadian Taxes rates on a province by province basis as of July 1, 2010.
| Province/Teritory | GST | PST | HST |
|---|---|---|---|
| Alberta | 5% | - | - |
| British Columbia | - | - | 12% |
| Manitoba | 5% | 7% | - |
| New Brunswick | - | - | 13% |
| Newfoundland and Labrador | - | - | 13% |
| Northwest Territories | 5% | - | - |
| Nova Scotia | - | - | 13% |
| Nunavut | 5% | - | - |
| Ontario | - | - | 13% |
| Prince Edward Island | - | - | 13% |
| Québec | 5% | 7.5% | - |
| Yukon | 5% | - | - |
Are you aware of the Transitional rules?
To provide clarity for businesses, transitional rules are required to determine which tax - the existing provincial retail sales tax or the provincial part of the HST - would apply to transactions that straddle the implementation date. For more information, see Transitional rules for personal property and services.
Source: http://cra.gc.ca
In relation to website development, this means that:
- any contract entered into on or after May 1, 2010 with a 90% completion after July 1 is subject to HST
- any contract entered into on or after May 1, 2010 with a 90% completion prior to July 1 is subject to GST only.
For more inforamtion or clarification, please visit the Canadian Revenue Website